A group of nearly 100 Democrats is fighting to block the creation of a massive slush fund after Donald Trump moved to withdraw his $10 billion lawsuit against the IRS and instead create a massive fund for his political allies.
The president’s lawyers filed the disclosure in federal court on Monday, but the filing did not disclose the terms of any resolution.
On Monday, the Justice Department announced the creation of the “Anti-Weaponization Fund” with $1.7 billion as a settlement agreement. It was signed by acting Attorney General Todd Blanche, who was also Trump’s former personal lawyer.
It comes after ABC News reported that Trump was prepared to drop his lawsuit as part of a deal to create the fund to help allies Trump believed were mistreated by the Justice Department under President Joe Biden.
But Democrats argued that the initial lawsuit was unconstitutional and urged Judge Kathleen Williams to dismiss it for lack of jurisdiction and to block any settlement arising from it.
“This is pure fraud and highway robbery. No one can be both plaintiff and defendant in the same case. And no president can concoct a fake case for $10 billion in damages against the government so he can be plaintiff and defendant and then ‘settle’ his bogus case against himself as a judge,” said House Judiciary Committee Ranking Member Jamie Raskin.
The Maryland Democrat accused Trump’s Justice Department of being in on the scam and warned the case is “nothing but a racket designed to take $1.7 billion of taxpayer dollars out of the Treasury and pour it into a huge slush fund for Trump at DOJ to hand out to his private militia of insurrectionists, rioters, and white supremacists.”
In their filing, Trump’s lawyers indicated that a judge’s review of any resolution would not be appropriate, but Democrats are gearing up for a fight.
As many as 93 House Democrats signed onto the amicus brief in the U.S. District Court for the Southern District of Florida.
“House Democrats are taking a stand for the American taxpayers that would be forced to foot the bill for this mess, and are calling on the court to block any unconstitutional settlements in the matter,” said Rep. Joe Neguse, who is helping lead Democrats’ effort.
Trump, along with his two sons, Don Jr. and Eric, first filed his lawsuit against the IRS in January, after the president’s and the Trump Organization’s tax records were leaked to news outlets in 2019 and 2020.
In 2024, former IRS contractor Charles Edward Littlejohn was sentenced to five years in prison after pleading guilty to leaking Trump’s tax information.
The Trumps originally argued in their lawsuit that the IRS’s failure to safeguard their records caused “reputational and financial harm, public embarrassment, unfairly tarnished their business reputations, portrayed them in a false light, and negatively affected President Trump, and the other Plaintiffs’ public standing.”
The report that Trump was planning to drop the lawsuit detailed how he was instead looking to create the fund to settle claims by those who accused the Biden administration of “weaponization” of the legal system, including the nearly 1,600 January 6 rioters who attacked the Capitol, as well as other entities associated with the president. The handouts would be solely controlled by a commission.
Senate Finance Committee Ranking Member Ron Wyden also slammed the agreement on Monday. He said if the creation of the fund is allowed to move forward, it would be the “most brazen theft and abuse of taxpayer dollars by any president in American history.”
